WTI oil trading firm over $104 amid higher US inventories

31 March 2011 31 March 2011

BonTrade

WTI oil futures open today’s trading session firm over $104 a barrel as the latest EIA data showed that US crude oil inventories rose higher than many analysts had forecast, while the US President called for more oil production at home.

Latest WTI Oil Price

US Light crude oil futures for May 2011 delivery was trading at $104.68 a barrel, 05.55 GMT this morning in electronic trading on the NYMEX.

US crude oil inventories rose a more than expected 2.95 million barrels last week and stocks at Cushing, the US delivery point for WTI crude oil jumped to a record high, according to the US EIA’s (Energy Information Administration) weekly report.

“Crude oil stocks rose more than many analysts were expecting and while gasoline stocks are drawing due to exports and the switch from winter to summer grade fuel, demand is not strong.” said Andy Lebow, a trader with MF Global, New York.

US Cushing Oil Stockpiles near Capacity

The EIA reported that crude oil stockpiles last week hit a record 41.9 million barrels in Cushing. Storage in the area is near capacity, a situation that has weighed on WTI oil futures even as Brent crude oil, Europe’s benchmark, is pulled higher by events in the Middle East and North Africa.

US Plans to Cut Oil Imports

Meanwhile, US President Barack Obama called Wednesday for cutting oil imports by one third over the next decade during a speech at Georgetown University.

Obama outlined plans for ensuring energy security amid record high oil prices during the address, in which he noted that at the time of his inauguration just over two years ago the US imported 11 million barrels of oil each day.

Last year, US oil production reached its highest level since 2003 and for the first time in a decade imported oil represented less than half of US consumption of liquid fuels.

To that end, the president stressed the importance of “finding and producing more oil at home. The US is sitting on supplies of American energy just waiting to be tapped.”